Edward Jones taps Greensfelder attorneys
By Heather Cole
St. Louis Business Journal
Updated: 7:00 p.m. ET Jan. 2, 2005
Embattled St. Louis investment firm, Edward Jones, has added a large Washington, D.C. law firm to its arsenal to handle federal regulatory agencies questioning the company's mutual fund investment practices.
advertisementJones hired Wilmer Cutler Pickering Hale and Dorr to represent the firm with the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE).
Locally, Jones continues to employ Greensfelder, Hemker & Gale to deal with an investigation by the U.S. attorney's office for the Eastern District of Missouri, multiple class action lawsuits, and a lawsuit filed by the California attorney general's office. Greensfelder has represented Edward Jones in securities arbitration and other matters for years.
Several attorneys at Greensfelder, including white collar crime and regulatory compliance attorneys Jeff Demerath and Richard Greenberg and litigation practice manager David Harris, have been representing Jones in various actions in 2004.
Early this year, the SEC and the NASD began looking into Edward Jones' mutual fund sales practices, including the practice of revenue sharing with select mutual fund families. News stories about the issue spurred the filing of several class action lawsuits.
On Dec. 20, Edward Jones, without admitting or denying wrongdoing, agreed to pay $75 million as part of a settlement agreement with the SEC, the NASD and NYSE, and Managing Partner Doug Hill agreed to pay $3 million of the settlement and step down from leading the firm at the end of 2005.
The settlement with regulators came on the same day that California Attorney General Bill Lockyer filed a securities fraud lawsuit against the firm, alleging it defrauded customers by failing to disclose the revenue sharing arrangements it had with seven mutual funds.
Harris, who has been defending Edward Jones in the class action lawsuits, may be taking on the California case as well. Harris declined to speak about his role representing Edward Jones, citing a request from the brokerage. But according to the Greensfelder Web site, he often represents large brokerage houses in securities class actions and arbitrations.
Nine class action lawsuits were filed against Edward Jones and its executive committee between January and March 2004, according to SEC filings. Five were filed in federal court in St. Louis, with the rest filed in either Los Angeles or New York.
Demerath and Greenberg are no strangers to federal regulatory issues. Demerath, who recently represented former Charter Communications executive David Barford in a federal case involving inflated subscriber numbers, is a former assistant U.S. attorney. Three other former Charter executives were indicted in the case. Charter, as a company, was not charged with wrongdoing.
Greenberg was a trial attorney, then an assistant director, in the civil division of the U.S. Justice Department in the 1980s. Demerath declined to speak about his role representing Edward Jones, also citing a request from the brokerage firm. Greenberg did not return a phone call.
Hill, meanwhile, is represented by Gordon Ankney, an attorney with Thompson Coburn, one of a team of attorneys that represented Charter at the time the four executives were indicted.
Ankney did not return several phone calls seeking comment.
St. Louis lawyers on the plaintiffs' side include Robert Blitz, a partner with St. Louis law firm Blitz, Bardgett & Deutsch. Blitz was one of the attorneys who filed a class action lawsuit on